Stocks under $10 pique our interest because they have room to grow (as well as the most affordable option contract premiums). That doesn’t mean they’re bargains though, and we urge investors to be careful as many have risky business models.
Luckily for you, our mission at StockStory is to help you make money and avoid losses by sorting the winners from the losers. That said, here are three stocks under $10 to swipe left on and some alternatives you should look into instead.
Coty (COTY)
Share Price: $5.78
With a portfolio boasting many household brands, Coty (NYSE:COTY) is a beauty products powerhouse spanning cosmetics, fragrances, and skincare.
Why Is COTY Not Exciting?
- Organic sales performance over the past two years indicates the company may need to make strategic adjustments or rely on M&A to catalyze faster growth
- Projected sales decline of 1.2% for the next 12 months points to a tough demand environment ahead
- Underwhelming 1% return on capital reflects management’s difficulties in finding profitable growth opportunities
At $5.78 per share, Coty trades at 10.2x forward price-to-earnings. If you’re considering COTY for your portfolio, see our FREE research report to learn more.
The Honest Company (HNST)
Share Price: $4.89
Co-founded by actress Jessica Alba, The Honest Company (NASDAQ:HNST) sells diapers and wipes, skin care products, and household cleaning products.
Why Are We Cautious About HNST?
- Annual revenue growth of 5.9% over the last three years was below our standards for the consumer staples sector
- Revenue base of $378.3 million puts it at a disadvantage compared to larger competitors exhibiting economies of scale
- Historical operating losses point to an inefficient cost structure
The Honest Company’s stock price of $4.89 implies a valuation ratio of 21x forward EV-to-EBITDA. To fully understand why you should be careful with HNST, check out our full research report (it’s free).
Applied Digital (APLD)
Share Price: $6.92
Pivoting from its origins in cryptocurrency mining to meet the surging demand for AI computing power, Applied Digital (NASDAQ:APLD) designs and operates specialized data centers that provide high-performance computing infrastructure for artificial intelligence and blockchain applications.
Why Do We Think Twice About APLD?
- Historically negative EPS raises concerns for risk-averse investors and makes its earnings potential harder to gauge
- Cash burn makes us question whether it can achieve sustainable long-term growth
- Unfavorable liquidity position could lead to additional equity financing that dilutes shareholders
Applied Digital is trading at $6.92 per share, or 17.2x forward EV-to-EBITDA. If you’re considering APLD for your portfolio, see our FREE research report to learn more.
Stocks We Like More
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Get started by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years.
Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Sterling Infrastructure (+1,096% five-year return). Find your next big winner with StockStory today for free.